The reason the Indonesian government gave for hiking taxes on imported film imports was to stimulate the local film industry.

Just days after the boycott began on Feb. 17, Tourism Minister Jero Wacik said the president, prompted by a comment from director Hanung Bramantyo in the local media about improving the domestic industry without imposing new taxes, had asked him to review the proposed tax regime.

On Thursday, Jero finally announced the plan to help the struggling industry, outlining a new company that would help fund local projects.

“We are going to establish Indonesian Film Finance to provide low-interest loans to Indonesian filmmakers,” he said. “This way we can help to improve the quantity and quality of Indonesian films.”

Aside from the help with funding, Jero said the Finance Ministry had also agreed to eliminate taxes on the importation of film production equipment. “Film production equipment and materials have always been listed as luxury items and therefore were slapped with high taxes,” he said.

However, Jero said it was not possible to do away with the value-added tax, either on domestic or foreign films. “So instead of revoking the value-added tax on domestic films, we are going to reduce the tax to a minimum level,” he said.

The country’s film industry has suffered a downturn in recent years. In 2009, only six local films sold more than a million tickets each at the box office. In 2010, only one movie broke the million mark.

Last year, 81 Indonesian films had cinema releases, slightly down from 83 films in 2009, although a significant decline from 91 big-screen releases in 2008. Even without Hollywood blockbusters, 75 foreign films were imported in the first seven months of this year.

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ASEAN ANALYSISThis year in Thailand-what next?AseanAffairs04 January 2011By David Swartzentruber

It is commonplace in
journalism to write two types of articles at the transition point
between the year that has passed and the New Year.
As this writer qualifies as an “old hand” in observing Thailand with a
track record dating back 14 years, it is time take a shot at what may
unfold in Thailand in 2011.

The first issue that can’t
be answered is the health of Thailand’s beloved King Bhumibol, who is
now 83 years old. He is the world's longest reigning monarch, but
elaborate birthday celebrations in December failed to mask concern over
his health.
More